Thursday, December 29, 2005

Long, complex sales cycles are often misunderstood by marketing staff. Marketers at companies with lengthy sales processes, such as software and technology companies, typically focus exclusively at the very top of the sales funnel, mistakenly believing that their only job is to "generate more leads."

These misguided marketers happily create expensive advertising campaigns and execute programs designed to drive more people into the cycle. Then they simply tie a pretty ribbon around the leads they generate and toss them over the cubicle wall to the sales department.

This strategy is ineffective

Savvy marketing professionals understand that sales and marketing must work together to move prospects through the sales pipeline. This is especially important in the complex sale, with long decision making cycles and multiple buyers that need to be influenced. The good news is that Web content drives people through and shortens the sales cycle for any product or service—especially complex ones that have many steps and take months or even years to complete.

First, understand your sales process in detail.All sales processes are definable, repeatable and understandable, and effective marketers use the Web to move people into and through the process. You need to get together with salespeople, sales management and product managers to understand exactly what happens in the sales cycle.

You should answer questions such as these:

How do people initially find your company or product?

When does the sales person first contact a potential buyer?

When do they talk about your company's products?

When do they offer a price quote?

Understanding the process in detail allows you to create a definable, repeatable and understandable process that Web content can influence.

Segment your prospects right from the home page

A very effective technique is to segment prospects by using "self-select paths" right from the home page. Consider creating a web page(s) dedicated for your prospective customer. A prospect is much more likely to enter the sales cycle by clicking a link that is designed especially for him/her.

Create thought-leadership content at the top of the sales funnel

People in the early stages of the sales cycle need basic information on the product category, especially "thought leadership" pieces. Don't just write about your company and your products at these early stages. When doing initial research, people don't want to hear about you and your company. They want information about them and their problems.

Make Web content, at the early part of the sales process for free

The job of Web content in the early stages of the sales consideration process is just to get a prospect interested in your organization. The best way is to provide valuable content that addresses their problems. You want to build empathy.

At this early stage, avoid forcing people to register their name and contact details. The best thing at that point is for your prospect to think:"These guys are smart. They understand my problems. I want to learn more."

Provide compelling and detailed content to get people to 'raise their hand' Once you've developed an online rapport through Web content, it is time to deliver something of value that you can trade for a registration form. Remember, if you are asking for someone's name and contact details, you must trade that personal information for something of equal or better value to your prospect.

At this stage, a compelling white paper, online event (such as a webinar), or online demo is appropriate to move your prospect further down the sales process—and she will happily "raise her hand" to express interest by filling out a form. At this point, you're still not ready to sell a product or service (yet).

When you pass a name to the sales department, provide as much detail about the prospect as you can

Congratulations. Now you've gotten the name of a prospect that a salesperson can contact. But you need to provide sales with as much detail as possible based on the content your prospect accessed. Together with the form she filled out, tell the salesperson details like "She clicked the 'I'm a financial executive' link from the homepage and then requested our white paper." When your salesperson contacts the prospect, he will already know details about her besides those just on the lead form.

Now that you're working the sales prospect, offer even more content

When a prospect is actually talking to sales, your marketing job is not done. Those further along in the process want to compare offerings and need detailed specifications and lists of features and benefits. You should create Web content to help your sales department move the prospect toward a close. Add her to your email newsletter list. Invite her to a webinar. Alert her to your corporate blog. Working with your salesperson, offer her online ROI calculators, feature comparison charts and other tools for the middle and latter portions of the sales cycle.And don't forget to make certain that your salespeople know about the content you're providing so that they can coordinate by pointing prospects there, too.

Measure and improveMeasure what content is being used and how. Understand through Web metrics what's working, and constantly tweak the content to make it better. Meet regularly with salespeople to gain insights into the sales cycle and how your Web content is helping the process. The good news is that the Web is that it is iterative—you can constantly make adjustments on the fly.

Closing ThoughtsIn an increasingly competitive marketplace with a complex sales process, Web content will unlock success, even in highly competitive industries where smaller players are beset upon by larger, better-funded competitors.

Few rules are more widely quoted in marketing today than the 80/20 Rule (the Pareto's Principle), which states that 80% of your sales come from just 20% of your customer base.

In this age of relationship marketing, this rule has become an often-heard battle cry to focus our efforts on maintaining the loyalty of customers belonging to the golden 20% that drive most of our business, while spending less effort on the trivial other 80%.

Intuitively, it makes sense. But this marketing interpretation of the 80/20 rule is actually flawed.

The present understanding of the 80/20 derives in large part from Dr. Joseph Juran, who in the 1940s wrote a wonderful article describing the 80/20 rule's applicability to industrial quality control. He concluded that the greatest quality gains were to be found in focusing quality assurance efforts on the 20% of all defects that cause 80% of problems. He saw that not all defects were created equal, so it is inefficient to treat them as if they were.

Juran's work has subsequently been expanded to a wide range of other fields, including marketing, where it has found a home in customer loyalty theory and relationship marketing. While interesting, the direct application of Juran's work to marketing is not as straightforward as it first appears, and care should be taken when applying it to our marketing practices.

The 80/20 rule as conceived by Juran assumes an equal return on investment for each opportunity. This is not an assumption that typically works in marketing, where the margins on sales vary widely based upon the terms of those sales. Most importantly, the more a customer buys, the more bargaining power they tend to have to drive down the price they pay per item.For instance, a bar of soap sold through Wal-Mart will tend to margin less for its manufacturer than the same bar of soap sold through a small grocery chain, since Wal-Mart's purchasing power enables it to drive a significantly better price per bar of soap than everyone else. This difference in margins means that the gains in volume catering to the golden 20% can come at the cost of a lower profit margin. When those differences are great, it is easy to have situations where the "trivial" 80% of customers are actually more profitable on only 20% of the volume.This observation lies at the heart of a richer interpretation of the 80/20 rule, which can lead you in many circumstances to do the exact opposite of what a simple Juran-style interpretation of 80/20 would lead us to believe.

An alternative way at looking at 80/20 rule in marketing is as a model for creating economy of scale through selling to a few high-volume customers at near cost, while funding continued overall business growth through selling at higher margins and lower volume to everyone else.As the high-volume customers drive down prices through leveraged negotiation, a marketer is able to offset the need to appease these powerful buyers by margining well everywhere else in their business, as long as they have an adequate population of low-volume buyers.

In this light, the 80/20 is not always an argument to wash our hands of low-volume customers. It actually is an argument to use a blended profit margin to achieve continued growth and competitiveness without being priced out of the highest-volume deals. Those high-volume deals, while having decreasing returns proportionate to their scale, are critical for a business to achieve the necessary economies of scale to competitively lower overall costs of production and distribution.

In other words, the highest-volume 20% of your customer base will drive profitability through creating efficient scales of business, while the lower 80% will drive profitability through aggressive margins. It is easy to see how these two strategies would work best when they feed off each other's efforts, rather than working in isolation. Indeed, there are often harsh growth limits for your business set by selling only to the "best" 20% of your customers, or engaging only in low-volume deals.

This is not to say that relationship marketing efforts to keep the loyalty of "golden" 20% should be abandoned; rather, the health of our marketing relationships with other 80% of our customers needs to be equally addressed and certainly not abandoned. The only exception to this general rule is when the margins on high- and low-volume customers are largely identical or random. In those cases, ignoring the 80% is probably a good idea.

Wednesday, December 14, 2005

In my earlier writing, I had written about use of Self Service Technologies. Self Service Technologies (SST) are changing the way customers interact with companies. As a result we are seeing a whole lot of firms developing innovative SST with a hope that their customers are satisfied. Firms are experimenting with a wide range of SST, from web based banking to an atrocious self service restaurants. (Recall a Sinefiled episode where Krammer has this new idea for a Pizza restaurant - Restaurant where customers can make their own Pizza’s!!)

Many of these technology products fail in their primary objective: Customer Satisfaction.

In order for an SST to succeed in making customer’s happy, firms must learn and know what drives customer satisfaction. Or in other words answer the question "What is Customer Satisfaction?"

I went around asking people "Define Customer Satisfaction". I was amazed to find out that everyone thinks that they know what is satisfaction, but when asked for a definition nobody knows to define "customer satisfaction".

A formal definition of Customer Satisfaction is: "Satisfaction is the customer’s fulfillment response. It is a judgment that a product or service feature, or the product or service itself. Provides a pleasurable level of consumption related experience"In layman terms, satisfaction is the customer’s evaluation of a product or service in terms of whether that product or service has met their needs and expectations. Failure to meet the needs and expectations can then result in dissatisfaction with the product or service.

Customer Satisfaction in SST

In this article, I will explain what drives customer satisfaction when customer provides his/her own service with SST. To begin with, I will answer these questions:

What are the sources of Customer Satisfaction and dissatisfaction in encounters involving SSTs?

Are the sources of customer satisfaction and dissatisfaction with SST encounters similar to or different from interpersonal encounters?

How does satisfaction or dissatisfaction with SST affect: Customer complaining, word-of-mouth campaigns and repurchase intentions?

Sources of Customer Satisfaction

Customer’s satisfaction is an outcome of the interaction between customer and the SST. If the outcome falls in the following category of results, the customer is always satisfied.

Solved my Immediate Need

The most satisfying encounter will occur when the SST in question provides an immediate relief to the customer’s most pressing problem. For example, Customer’s parent is sick & he needs to travel immediately. The online ticket booking helped the customer book a flight ticket and reach his destination. Another example: A customer needs cash immediately to meet a sudden expense - ATM solved the problem.

Better than the Alternative

The second most satisfying encounter happens when SST provides service which is better than the other alternatives. A good example is Fedex’s on-line package tracking system. Earlier there was no way a customer to track the package. The on-line tracking provides a benefit which was nonexistent before.

Easy to Use

If the SST is easy to use than the interpersonal service alternative, then SST leads to customer satisfaction. For example booking a ticket over the Internet is better than doing it over the phone for a Computer Savvy person.

Avoid Service Personnel

SST’s provide an alternative to customers who prefers to avoid customer service personnel for various reasons: Customer may have difficulty in talking in a particular language, may feel that salesperson is trying to sell something he/she does not need or customer is shy. DELL’s Online computer order is another classic example. Customers can configure their PC, know the price and order online. For many people, this is easier than interacting with the salesperson over the phone.

Saves Time

Most customers are satisfied when SST saves time. For a busy individual, time is precious. If SST saves time when compared to other alternatives, customers are satisfied. For example, getting a SMS alert when a bank check is cleared gives the required information to the customer - and customer does not have to spend time either logging online or calling the bank.

When I want & Where I want

Customers like to be serviced when they want and not when it can be provided. For example, many of us like to buy a book or something when we want to do so, and need not have to wait for the store to open. Amazon.com provides Internet based option to buy books any time - anywhere and is shipped to where ever the customer wants.

Saves Money

SST provides platform for customers to provide their own service. Therefore customer will be delighted if the service alternative from an SST is cheaper than the interpersonal alternative. For example, Online banking is offered for free of charge and the bank charges a small fee for using the services of a bank teller to check the account status. This will make customers move towards SSTs and avoid bank personnel.

Did its Job

Once the customer is used to providing his/her own service via SST, customer is satisfied when the SST did the job like expected. For example, if the banks ATMs work flawlessly all the time - and customer had no issues, then it leads to customer satisfaction.

Sources of Customer Dissatisfaction

Technology has to potential to agonize the customer and make the customer totally dissatisfied with the SST. Customer dissatisfaction arises from:

Technology Failure

SST is driven by technology and technology can (and in many circumstances will) fail. When SST fails to perform as expected, customers are dissatisfied.

Typical examples are: Web server is down - thus customer cannot log in, or ATM machine is broke. Companies cannot do much in terms of service recovery when technology breaks down, however it can take steps to alleviate customer dissatisfaction by providing alternatives. For example providing a list of the nearest ATMs at all ATM locations or providing a telephone at the ATM booth so that the customer can use phone banking etc. In case of Web service related failure, the company can provide a phone number for the customer to call in and place an order or do an inquiry etc.

Customers have become accustomed to some level of technology failure - but they expect the service provider to fix the problem at the earliest - if that happens, then the level of customer dissatisfaction is reduced. In the above example, if the bank fixes the ATM within few hours of failure or if the web site is back in operation within few hours, then customers not likely to hold it against the service provider. But if the ATM is not fixed even after one week - then the bank has lost the customer for good.

Process Failure

Process failure is an outcome of unintended consequences. Here the SST functioned but delivered a wrong result. To understand this, consider the following example: Customer logs in to Amazon.com and orders a book, the system records the order and gives an acknowledgment - but automated shipment processing machine sends the wrong book to the customer.

Poor Design

Designing an SST which meets the requirements of all customers is tough. Often there will be situations where the SST fails to meet the requirement of all the customers. Poor design manifests itself in two forms:

a.Technology Design problem

There are instances where the SST performed as it was designed to, but the technology performed in such a way that the customer was unhappy with the encounter. For example, Online Train Schedule information offered by Indian Railways - the system works the way it is designed, but for the user, it is almost impossible to read the train schedules - as all the data is presented in cryptic format.

Technology design problems are most common in Web based services & in automated telephone systems. This happens because the persons designing the system do not use the system.

b.Service design problem

There are some instances where SSTs performed as they are designed to, but the design has a flaw. For example, an online bookseller who has not provided the option for the goods to be delivered to an address different than that of credit card holder’s address. Another common instance of this design flaw:- Web sites which provide you an option to retrieve your password, but it insists on you entering your old password (which you are trying to retrieve)

In these cases, technology did not fail, the SST performed perfectly as per the design. But the design was flawed.

Customer-Driven Failure

For SST’s to work, customers have to be technology savvy. There are times when companies have moved to SST and have removed all other service options. When customers are not technology savvy, they get intimidated or annoyed - and dissatisfied with the SST.

For Example, my father does not know how to use all the features in the cell phone and finds using the voice mail facility to be very challenging - as a result, he is dissatisfied with this new service.

Customer Reaction to SST

When customers interact with an SST - there will always be a reaction: sometimes positive, sometimes negative. Although the customers are creating their own service through SST, customers rarely blame themselves for any dissatisfying experience. Most customers are reluctant to complain about the faulty service but they are more than willing to spread the word around. This implies that companies which deploy SST must keep a close watch on customer’s reaction to a SST interaction.

I cannot recall a single incident when I have picked up the phone to tell the bank that their ATM is not working. But there has been several instances when I had recommended others not to use a particular service.

Closing thoughts

SST’s have come of age and are being used extensively. In the future - we will see several new forms of SST’s. Firms which are deploying SST’s must be careful not to alienate their customers through bad design/implementation of the technology. Service recovery with SST is difficult and challenging. Therefore SST’s must be deployed selectively and after intensive testing.

Monday, December 12, 2005

Notice how all successful brands are so distinct. By distinct, I mean the brand name is distinct even when there is very little product differentiation. Consider the example of Nikon & Cannon cameras. Both are very successful brands - and yet there is little product difference. Yet both the brands have lots of fiercely loyal customers.

On the other hand, consider the case of Pepsodent and Mentadent toothpaste. Both are good products created and marketed by Unilever. Initially Pepsodent was a big success and captured a significant market share from Colgate. But with introduction of Mentadent brand toothpaste, Unilever lost its US market share - and ended up by selling both the brands to Church & Dwright in 2003. At the same time Arm & Hammer and Crest brands have grown in market share.

Another similar story is repeated in India. Several brands of fairness cream - Fairever, Fair & handsome, Fairone etc. were introduced to compete with the market leader Fair & Lovely. These creams were good products and was offered at a lower price than Fair and lovely, yet the brand Fair & Lovely has 80% of the market share - and is growing.

Now, doesn’t that tell something is wrong?

It does!! And the problem lies with the brand name. Having a similar brand name as that of market leader makes the product a "me-too" product - thus losing its brand differentiator value.

These "me-too" brands have just two chances. They either wither out or speed into a hard-to-grow trap. Brands such as Fairever may continue to exist - but it will not gain any significant market share. Or in case of Hycol - a competitor to Fevicol, the brand disappears. Some of these me-too types, though backed by sound business logic and spirited entrepreneurs, are sure to vanish. They might turn in money but they also ensure that the promoters do not think long-term or promotions because every move to promote "me-too" brands would only uphold the superiority of the targeted brand.

Miming names are flawed fundamentally

A classic branding mistake yet widely believed to trigger success. These brands hang on till they find the toil unworthy. The brand will have initial success if the product is good, but once they become marginally successful, it will fall into the hard-to-grow trap. At this point the market share of the brand suffers from an up-now, down-now syndrome. Beyond this point the company would find the investments in marketing not really yielding.

A few "Me-Too" brands succeed for reasons anything but the name. In fact, they succeed in spite of the name. Invariably, low price is the strategy that puts such brands afloat. In time, smartly managed ones grow till they have carved a segment for themselves. The task now on is more about defending than conquering.

Success apart, these brands lack the potential for progressive branding. Unbelievably, the cap is fixed by the sound of their name, which casts them into a default position. While the promoters may believe that their brand is a challenger, the market perceives it as an imitator.Fairever, Fairglow and any brand that rhymes with Fair & Lovely would be perceived as underdogs and remain so.

Every move to promote "Me-Too" brands would only uphold the superiority of the targeted brand. Miming names are flawed fundamentally. Even the instant awareness they generate is intrinsically negative. If differentiation is the way to build brands, imitating the competitor’s name is surely wrong thing to do. I can almost hear arguments; how else to call a fairness cream without the word Fair? Well, the very question suggests a challenge and has an opportunity hidden within.

Way Out

What’s the way out to compete when your "Me-Too" brand hits this road block? No options but to build another brand. An independent one—not an extension—that can knock the leader off the shelves.

If CavinKare (makers of Fairever) follows this mantra, it has the potential to snatch as much share with a new brand in half the time it did with Fairever. But companies hardly learn from others’ pitfalls. Recently, Emami, a visibly brand conscious company, has launched a right product with a wrong name - Fair & Handsome. Its mistake has been in choosing the most logical and apparently right name - a name that puts the cap on the possibilities irrespective of market opportunity.

Along from a "Me-Too" brand naming mistake, the worst marketing mistakes are briefly described below.

Nine Major Marketing Mistakes

In today's world, there's so much competition that if you make a mistake your competitors quickly get your business. The chances of getting it back are very slim unless someone else makes a mistake. Hoping competitors make mistakes is like running a race hoping the other racers fall down: It just doesn't happen very often.

Here are the blunders that are the most prevalent in today's hyper-competitive world.

Me-Too

Many people believe that the basic issue in marketing is convincing prospects that you have a better product or service. They say to themselves, "We might not be first, but we're going to be better." That might be true, but if you're late, and you have to do battle with large, well-established competitors, then your marketing strategy is probably faulty. Me-too just won't cut it.

What Are You Selling?

This may surprise you, but a good bit of my time over the years has been spent figuring out exactly what it is that people are trying to sell. In other words, trying to capture the category in a simple, understandable way. Companies, large and small, often have a very tough time describing their product, especially if it's a new category and a new technology. Your biggest marketing successes come with simple, but powerful explanations of what you're offering. Don't get cute or complex.

Truth Will Win Out

Not understanding that marketing is a battle of perceptions, is a simple truth that trips up thousands of would-be entrepreneurs every year. Marketing people are preoccupied with doing research and "getting the facts." They analyze the situation to make sure the truth is on their side. Then they sail confidently into the marketing arena, secure in the knowledge that they have the best product and that ultimately the best product will win.

It's an illusion. There is no objective reality. There are no facts. There are no best products. All that exists in the world of marketing are perceptions in the minds of the customer or prospect. The perception is the reality. Everything else is an illusion.

The Other Guy's Idea

It's bad enough to launch a me-too product, but equally problematic is a me-too idea. The reason is that two companies cannot own the same concept in the prospect's mind. When a competitor owns a word or position in the prospect's mind, it is futile to attempt to own the same word.

Volvo has pre-empted the concept of "safety." Many other automobile companies, including Mercedes-Benz and General Motors have tried to run marketing campaigns based on safety. Yet no one except Volvo has succeeded in getting into the prospect's mind with a safety message.

We're Very SuccessfulAs I've written in the past, success often leads to arrogance and arrogance to failure. When people become successful, they tend to become less objective. They often substitute their own judgment for what the market wants.

As their successes mounted, companies like General Motors, Sears and IBM became arrogant. They felt they could do anything they wanted to in the marketplace. Success leads to trouble.

Everything For Everybody

When you try to be all things to all people, you inevitably wind up in trouble. Better advice comes from one manager who said, "I'd rather be strong somewhere than weak everywhere." This kind of "all things" thinking leads to what we call "line extension," or trying to use a successful brand to mean more than it can in the mind. It's a very popular mistake.

Live By The Numbers

Big companies are in a bind. On the one hand, they have Wall Street staring at them asking, "How much are your sales and profits going to grow next month, next quarter, next year?" On the other hand, there are an endless number of competitors staring at them saying, "We're not going to let you grow if we can help it."

So what happens? The CEO lies to Wall Street and then turns around to the marketing people and tells them what is expected in terms of profit and growth. They in turn scramble back to their offices and try to figure out how to make those unreasonable numbers. Brash predictions about earnings growth often lead to missed targets, battered stock and even creative accounting. But worse than that, it leads to bad decisions.

As panic sets in, what often happens is that they fall into the line extension, or the everything for everybody trap. Rather than stay focused on being strong somewhere, to drive their numbers up they opt for weak everywhere. Their only hope is that they will be promoted before it all hits the fan.

Not Attacking Yourself

Much has been written about the likes of Dell, Xerox, AT&T and Kodak, and their efforts to move from slow growth to high growth businesses. When this is exacerbated, companies are faced with what have been called disruptive technologies. Dell facing the desktop computer revolution. Xerox facing the surge in laser printing, and Kodak facing the digital camera.Though difficult, a leader has no choice in this matter. They must find a way to move to that better idea or technology, even if it threatens their base business. If they don't, their future will be in question. Especially as that technology is improved and picks up momentum. The trick is how to do it.

Not Being In Charge

When the CEO or very high level management doesn't take charge of strategy, things rarely go well. In today's rough and tumble world, marketing strategy is too important to be left to middle level management.

Tuesday, December 06, 2005

As an enginner I often hear lots of jargon which for an layman or a fresh college graduate may sound like Greek or Latin. So I decided to put in a small list of most commonly used words in the software Industry. (BTW I am still compiling a similar list for ASIC industry)

Acceptable Quality Level (AQL)ANSI/ASQC Z1.4-1981 defines AQL as “the maximum percent nonconforming (or the maximum number of nonconformities per hundred units) that, for purposes of sampling inspection, can be considered satisfactory as a process average.”

Acceptance TestingTesting to ensure that the system meets the needs of the organization and the end user or customer (i.e., validates that the right system was built).

Access ModelingUsed to verify that data requirements (represented in the form of an entity-relationship diagram) support the data demands of process requirements (represented in data flow diagrams and process specifications.)

Activity An identifiable work task that needs to be controlled.

Affinity DiagramA group process that takes large amounts of language data, such as a list developed by brainstorming, and divides it into categories.

ANSIThe American National Standards Institute that is the organization that helps set standards and also represents the United States in international standards bodies.

AuditAn independent inspection or assessment activity that verifies compliance with plans, policies, and proce­dures, and ensures that resources are conserved. Audit is a staff function; it serves as the "eyes and ears" of management.

BacklogWork waiting to be done; for IT this in­cludes new systems to be developed and enhancements to be made to existing systems. To be included in the development backlog, the work must have been cost-justified and approved for development.

Baseline A quantitative measure of the current level of performance.

Benchmark An industry or best-of-class norm.

BenchmarkingSearches for the best practices or competitive practices that will help define superior performance of a product, service, or support pro­cess.

Black-Box TestingData driven testing that focuses on evaluating the function of a program against its specifications.

Brainstorming A group process for generating creative and diverse ideas.

Cause-and-Effect or Fishbone DiagramA tool used to identify possible causes of a problem by repre­senting the relationship between some effect and its possible causes.

CelebratingA group activity in which a team's success is made known publicly and praised. This may include tangible rewards such as refreshments and award certificates.

Charter A document defining the formal organiza­tion of a corporate body: a constitution. Authoriza­tion from a central or parent organization to establish a new branch, chapter, etc.

Check Sheet A form used to record data as it is gathered.

Client The customer that pays for the product received, and receives the benefit from the use of the product.

Coaching Providing advice and encouragement to an individual or individu­als to promote a desired behavior.

Conflict Resolution The process of bringing a situation into focus and satisfactorily reducing or eliminating a disagreement or difference between parties.

Contributor Measure A unit of measure by which a result measure is controlled. Contributor measures do not impact the customer directly, but contribute to the success of the result.

Control ChartA statistical method for distinguishing between common and special cause variation exhibited by processes.

Control UnitA critical success factor that must be managed to achieve the success of a goal, policy, or strategy.

Cost of Quality (COQ)Money spent above and beyond expected production costs (labor, materials, equipment) to ensure that the product the customer receives is defect free. This includes the cost of repairing a defective product that was shipped to a customer and the associated damage costs.

CustomerThe individual or organization, internal or external to the producing organization, that procures the product.

Customer-Recorded ImpactsThe positive and negative effects upon the customer resulting from IT actions.

DashboardAn aggregation of measures, together with their standards, that provides a quantitative analysis of critical components of a process.

DefectFrom the produc­er's viewpoint, a defect is a product requirement that has not been met, or a product attribute possessed by a product or a function performed by a product that is not in the statement of requirements that define the product. From the customer's viewpoint, a defect is anything that causes customer dissatisfaction, whether in the statement of requirements or not.

Defect RateAny relationship between identified measures that indicates, to the metric users, a level of quality.

Effective ListeningActively listening to what is said by asking for clarification when needed, and providing feedback statements on what was said to reinforce understanding and acknowledge that listening is occurring.

Effective PresentationProviding or teaching information in a manner that transfers understanding and is appropriate to the audience. The proper use and value of videos, slides, overheads, flipcharts, handouts, brochures, and PC projections are examples of common tools and should be understood.

EIAThe Electronics Industry Association, which is an ANSI-accredited standards developer. The EIA is the national trade organization that represents United States electronics manufacturers.

EmpowermentGiving people the knowledge, skills, and authority to act within their area of expertise to do the work and also improve the process.

Exception ReportingThe process of reporting only significant variances from what was expected.

FacilitationThe process of helping the progress of some event or activity. An understanding of formal facilitation includes well-defined roles, objectivity of the facilitator, a structured meeting, decision-making by consensus, and defined goals to be achieved.

First Party AuditAn internal audit conducted by auditors who are employed by the organization being audited, but who have no vested interest in the audit results.

FlowchartA diagram that shows the sequential steps of a process or of a workflow around a product or ser­vice.

Force Field AnalysisA group tech­nique used to identify both driving and restraining forces that influence a current situation.

Functional TestsTests of business requirements that address the overall behavior of the system.

GainsharingSharing in the savings from quality improvement efforts.

HistogramA graphical description of individual measured values in a data set that is organized according to the frequency or relative frequency of occurrence. A histogram illustrates the shape of the distribu­tion of individual values in the data set along with information regarding the average and variation.

IECThe International Electrotechnical Commission.

IEEEThe Institute of Electrical and Electronics Engineers, which is the world’s largest technical professional society with members in almost 150 countries.

Influencing SkillsCapabilities and techniques developed to cause one person to have a certain planned effect on another.

InputsProducts, services, or information needed from suppliers to make a process work.

Integration TestingTesting performed on groups of modules to ensure that data and control are passed properly between modules.

International Organization for Standardization (ISO)ISO is a network of the national standards institutes of 146 countries, on the basis of one member per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system. ISO is a non-governmental organization: its members are not, as is the case in the United Nations system, delegations of national governments.

Interpersonal EffectivenessThe ability to work and negotiate effectively with personnel of different professions, skill levels, organizational levels and varying experience.

InterviewingDeveloping and asking questions for the purpose of collecting oral data to be used in an analysis or evaluation.

Joint Application Development (JAD) SessionA meeting where the producer and customer come together to negotiate and agree upon requirements.

Just-in-Time (JIT)The system known as “the Toyota production system” that has set the standard for world-class manufacturing. The ultimate goal of JIT production is to supply each process with exactly the required items, in exactly the required quantity, at exactly the required time.

Key Result AreasBroad-based areas of perfor­mance that, when measured, give a unit an evaluation of its critical customer-driven processes.

LeadershipThe ability to guide or influence a group to move in some direction, including inspiring others in a shared vision of what can be, taking risks, serving as a role model, reinforcing and rewarding the accomplishments of others, and helping others to act.

Level of ServiceThe average performance received by the customer per criterion over a given period of time, which is normally 30 days.

Likert ScaleA way to collect measures, typically on a survey. A Likert Scale contains categories such as Very Satisfied, Slightly Satisfied, Satisfied, Slightly Dissatisfied, and Very Dissatisfied.

MaintenanceThe process of modifying errors found in a released software product.

ManagementA team or individual that manages resources at any level of the organization. Management obtains results through the efforts of other people. It is everyone in the organization except those in positions specifically designated as non-management.

Management by FactThe process of using qualitative and quantitative data produced from and about work processes to make informed decisions regarding the operation of those work processes. The two components of this process are meeting desired results, and managing the processes to drive the results.

Management by ProcessThe use of processes to achieve management’s desired results.

MeanA number that represents a set of numbers in any of several ways determined by a rule involving all members of the set: AVERAGE.

MeasureA single attribute of an entity; a standard unit.

Meeting ManagementThe process of organizing and conducting meetings to provide maximum productivity over the shortest time period.

MetricTwo or more measures combined in a relationship to each other to produce information about an entity.

Metric NameA short name or expression that conveys the intent of the quality characteristic.

MissionA customer-oriented statement of purpose for a unit or a team.

NegotiationThe process of working together with one or more parties to establish goals to be reached, create options that will satisfy all parties, and select an option that is best for all parties. May utilize skills such as compromising and consensus building.

Objective Performance MeasurementA quantifiable means of measuring the level of service received, such as the number of times reports were late during the month.

Outputs Products, services, or information that result from a process.

Perfective Maintenance The act of improving the product at the same time a fix is made. This is risky and not recommended.

Performance Criteria Major performance related categories, such as accuracy, quality, or timeliness.

Performance StandardsDefined, measurable levels of IT service applicable to an individual customer organization or a group of customer organizations.

PerspectiveThe point of view from which assessments or customer satisfaction and quality can be made. Examples include the customer’s view and the provider’s view of quality.

Problem Reporting/TrackingThe process of reporting outstanding problems; having them assigned for resolution, and closing them out when the customer has been notified that the problems have been solved.

ProcedureThe step-by-step method followed to ensure that standards are met.

Process(1) The work effort that produces a product. This includes efforts of people and equipment guided by policies, standards, and procedures. (2) A statement of purpose and an essential set of practices (activities) that address that purpose. A process or set of processes is used by an organization or project to plan, manage, execute, monitor, control, and improve its software related activities.

Process DefinitionA description of the organization's current best practice approaches so that the process is understood, consistently performed, and ready for improvement or redesign.

Process ImprovementThe progression of steps taken to change a process to make it produce a given product faster, more economically, or of higher quality. Such changes may require the product to be changed. It involves improving process capability and reducing variation by analyzing the process and product results, identifying root-cause problems, and changing the process to eliminate root causes. The defect rate must be maintained or reduced.

Process Re-engineeringThe fundamental rethinking and radical redesign of business processes.

Product (or Services)The output of a process: the work product. There are three useful classes of products: Manufactured Products (standard and custom), Administrative or Information Products (invoices, letters, etc.), and Service Products (physical, intellectual, physiological, and psychologi­cal). Products are defined by a statement of requirements.

Product or ServiceSomething produced or provided to meet the customer’s requirement.

Product ImprovementChanging the statement of requirements that defines a product to make the product more satisfying and attractive to the customer (more competitive). Such changes may add to, or delete from, the list of attributes or the list of functions defining a product. Such changes frequently require the process to be changed. This process could result in a totally new product.

Production CostsThe cost of producing a product. Production costs, as currently reported, consist of (at least) two parts; actual production or right-the-first time costs (RFT) plus the Cost of Quality. RFT costs include labor, materials, and equipment needed to provide the product RFT.

ProductivityThe ratio of the output of a process to the input, usually measured in the same units. It is frequently useful to compare the value added to a product by a process, to the value of the input resourc­es required (using fair market values for both input and output).

QualityOperationally, the word quality refers to products. A product is a quality product if it is defect free. To the producer, a product is a quality product if it meets or conforms to the statement of require­ments that defines the product. This statement is usually shortened to: quality means meets require­ments. To the customer, a product is a quality product if it meets the customer’s needs, regardless of whether the requirements were met. This is referred to as fit for use.

Quality Assurance (QA)The set of support activi­ties (including facilitation, training, measurement, and analysis) needed to provide adequate confidence that processes are established and continuously improved to produce products that meet specifications and are fit for use.

Quality Control (QC)The process by which product quality is compared with applicable standards, and the action taken when a nonconformance is detected. It focuses on defect detection and removal. This is a line function - performance of these tasks is the responsibility of the people work­ing within the process.

Quality Function DeploymentA systematic matrix method used to translate customer wants or needs into product or service characteristics that will have a significant positive impact on meeting customer demands.

Quality ImprovementThe change to a production process so that the rate at which defective products (defects) are produced is reduced. Some process changes may require the product to be changed.

Quality Management (QM)(1) A philosophy consisting of continuous process improvement activities involving everyone in the organization in an integrated effort to improve performance at every level. It requires the commitment of executive management, and an empowerment of employees at all levels that enables them to participate in the improvement of the processes that create products and services. (2) Quality management integrates fundamental management techniques, existing improvement efforts, teamwork, and technical tools in a disciplined approach focused on continuous process improvement. It is also called total customer focus, total quality control, quality assurance, and a leadership program.

Quality MeasureA quantitative assessment of the extent that a product or service demonstrates successful performance, conforms to its requirements, or possesses a given attribute.

Quality MetricAny relationship between identified measures that indicates, to the metric users, a level of quality.

Regression TestingTesting after changes have been made to ensure that no unwanted changes were introduced.

Reliable MeasureA reliable measure is one that: a) if the measure were to be taken again, the result would be the same; and b) if two or more different people developed the same measure, they would produce the same results.

Reporting FrequencyHow often a particular report is developed and distributed to its audience.

RequirementA formal statement of: 1) an attribute to be possessed by the product or a function to be performed by the product; 2) the performance standard for the attribute or function; or 3) the measuring process to be used in verifying that the standard has been met.

Result MeasureA critical success factor or value that must be controlled through measurement. Result measures directly impact the customer.

Run ChartA graph of data points in chronological order used to illustrate trends or cycles of the charac­teristic being measured to suggest­ an assignable cause rather than random variation.

SamplingLooking at a small number of work products or a section of the work product rather than at each product.

Scatter Plot (Correlation Diagram) A graph de­signed to show whether there is a relationship between two changing factors.

Second Party AuditAn external audit performed on a supplier, by a customer or a contracted (consulting) organization on behalf of the customer.

Service-Level Objectives A published level of service that information technology will provide customers by performance criterion.

ServicesSee Product.

Stakeholders Individuals who have a vested interest in the success or failure of a quality initiative.

Standard A requirement of a product or process. For example: 100 percent of the functionality must be tested.

Standardize The implementation of procedures to ensure that the output of a process is maintained at a desired level.

Statement of Requirements The exhaustive list of requirements that define a product. The Statement of Requirements should document re­quirements proposed and rejected (including the reason for the rejection) during the requirement determination process.

Static Testing Testing performed without executing the system’s code; can be manual (e.g., reviews) or automated (e.g., code or writing analyzers).

Statistical Process Control The use of statistical techniques and tools to measure an ongoing pro­cess for change or stability.

Structural Tests Tests that require knowledge of the internal logic of a system.

Subjective Performance Measurement A person's perception of a product or activity, including personal attitudes, feelings, and opinions, such as how user-friendly the application is. Different people may measure different values for the same item because of their subjective judgment.

Supplier An individual or organization that provides the inputs needed to generate a product, service, or information to a customer.

System Testing1) A generic term that differentiates various types of higher order testing from unit testing; 2) A predetermined combination of tests that, when executed successfully, satisfy IT management that the system meets requirements.

Taxonomy Categorization of items for understanding and use.

Team BuildingThe process of aiding a group to define a common goal and work together towards that goal.

Third Party Audit An external audit performed on a supplier by an external participant other than the customer.

Unit Testing Testing performed on a single, stand-alone module or unit of code.

User The customer that actually uses the product received.

Validation Any activity that helps assure that the end product (e.g., system) under defined operating conditions meets its currently approved requirements and expectations.

Verification All QC activities throughout the life cycle that assure that interim product deliverables process their inputs in accordance with specifications and standards.

Vision A statement that describes the desired future state of a unit.

White-Box Testing Testing based on knowledge of internal code structure and logic.

Friday, November 25, 2005

As a student at University of Texas, my marketing professor always said "Best friend of a marketing manager should work in Accounting department (of the same company)".

Knowing how much importance Wall Street gives to quarterly numbers, it is not surprising that all public companies focus of short term Return on Investment (ROI). This maniacal focus on ROI is seen in marketing activities also. Marketing chiefs are now looking at immediate increase in sales for every dollar spent by marketing. Though this exercise is doomed from the start - as it is impossible to tie each dollar of marketing expense to sales.

While ROI in sales promotion and advertising can be measured. But in marketing big ticket items - the marketing ROI cannot be measured on a quarterly to quarterly basis. For example in high technology products, like semiconductors or industrial furnaces, marketing money is spent to educate potential customers, generate market awareness and to build brand recognition. These activities cannot really show an immediate sales shift. Similarly, customer relationship expansion and retention initiatives take time to achieve and to be observed having their intended effects.

So now I understand why my professor said "Best friend of a marketing manager should work in Accounting department (of the same company)."

By having a friend in accounting/Finance department, it will be easy to exclude certain expenses towards ROI calculation (for internal purposes only ) also one can get the expense report for a longer periods of time to measure the overall improvement in sales performance. Thus make it possible to redefine the business performance of marketing effectiveness and accountability more broadly, so that they take into account the full span of marketing investments and long time horizons.

Observations on Marketing mix effectiveness

Many companies develop predictive models to guide future planning and investment decisions. Using historical data on marketing mix spending, Sales revenue is split into parts that can be attributed to advertising, promotion, distribution, product, and pricing. The elasticities of each of these components of marketing mix is then used to simulate what would happen to future sales if each of these marketing levers were changed. These results are analyzed and graphed over time. This analysis often reveal that the effects of the marketing levers account for a relatively small changes in the overall sales of the brand.

The largest component of total sales is found in the brand level. The sales of a particular brand are not influenced by immediate changes in marketing lever (such as promotion spending and price changes). In other words, it represents the endurance of the brand reputation that is independent of the marginal changes made in brand marketing tactics on a daily basis.This clearly illustrates the value and consequence of the building and managing of the brand that has taken place over the years. Brand value or Brand reputation results from activities of the marketing organization along with other parts of the company, such as manufacturing, supply chain, etc.

Brand value or Brand Reputation is an extremely important asset and should be well understood in order to sustain it, increase it, and apply the learning to other parts of the business.

Brand, price, and product features:

Marketing Mangers often seek to understand the drivers of customer choice to support product design, development, and positioning decisions. In the process, they look at the tradeoffs customers make between brand, price, and functional attributes of the product. Attributes include structural features such as the processor, memory, and screen options for a personal computer and other electronic devices.

Sophisticated analyses, such as conjoint or discrete choice experimentation and try to isolate the value of individual features and price from the pure brand value. But quite often in high tech products the benefit to consumers of the features far outweighs the pure brand preference. In other words, the largest shift (increase/decrease) in sales comes from changes in product features.

There are exceptions to this general observation (e.g., consumer products with strong brand preferences such as soaps, toothpaste etc.)

To fully assess the sales impact of feature changes in product or service, A detailed analysis must be conducted. Such analysis should include the cost of creating and delivering the additional features. This should also be a part of the marketing effectiveness discussion along with the discussions of brand value and marketing communication effectiveness.

Customer Experience

The customer’s experience with a product or service and its provider is often an important driver of customer relationship expansion and loyalty. Customer experience begins in the information search and shopping phase. It becomes more intense through available channels during the actual purchase process, leading to a transaction. It continues as the customer uses the product, receives continuing service and support, and decides when the time comes whether to remain a customer and repeat purchaser.

The magnitude of the effects of these experience variables is often hard to detect because they occur over time and are the result of the company’s overall business model for delivering value to customers, not necessarily the result of particular initiatives (from marketing, operations, or elsewhere). Many service companies have high levels of retention and repeat purchases (e.g., 90% or more).

Presumably they are doing a lot things right to achieve those levels continuously. While specific things can be done to "save" defectors and incrementally improve satisfaction scores, the generally high base level of these measures is relatively stable over time, unless there is a major service delivery or quality problem. This is another example of the great value in brand delivery system structure that creates the base level of retention. Marketing expenses for incremental improvements in service/product delivery should be thought of differently like strategic actions taken to preserve and grow the base business.

Closing Thoughts

Discussion on Marketing effectiveness should therefore focus on long term factors such as brand value, brand reputation, customer retention, product features. Long-term value creation requires an understanding of what constitutes the features of a brand, what creates that value, and what can be done to build on it. Use the tools of finance to focus the discussion of marketing productivity to the long term results.

NOTE: I wrote this with high tech marketing in mind. Marketing high tech products are usually not advertised and do not involve sales promotion. Here sales is mostly connected to product features, brand value and customer experiences. The above argument has little significance in consumer products.

Tuesday, November 22, 2005

I have been writing this Blog for some time now and I have concentrated my writings on marketing. So after a while, I started to look at the feasibility of using blogs as another marketing platform in the Internet world. After a detailed study and analysis, here is what I have to say about corporate blogs.

What is a Blog?

The term "Blog" comes from Web log, i.e, an online log or dairy. Though publishing content on web has been around for a long time, Blog emerged through a software which makes it easier for creating professional looking web pages - which give users a easy-to-use, low cost platform to publish their thoughts, images, videos, articles etc. online.

The concept of blogs became popular in 2003. By 2005, there has been millions of personal blogs. However there has been relatively very few corporate blogs. Most corporate blogs are written by company employees on voluantary basis - and in most cases these blogs do not have any official sanction. The rapid growth of blogs should act as an eye opener for the marketing department and actively involve in publishing corporate blogs. Few firms have started taking active steps to promote blogs. For example, SUN Microsystems has created www.blogs.sun.com and has more than 2000 employees publishing their blogs on it. Similarly IBM, GM, Microsoft, Google, RedHat etc have created blog portals within their corporate website.

Market Potential of Blogs

Bob Litz, Vice Chairman of product development at General Motors, wants to get quick feedback from consumers on the company’s latest product launch, new strategy, or something as specific as the quality of the sheet-metal fits on the latest Chevrolet, he knows where to go:his corporate blog, http://fastlane.gmblogs.com.

Product Manager of Microsoft logs on to a blog to know customer’s first reaction to X-Box 360. He sees a posting of a customer not being able to do a particular maneuver in game, he quickly replies to that and posts it on the blog - so that other customers can read it and know what to do.

These example show how a blog is an incredibly effective yet low-cost way to:

Influence the public "conversation" about your company:Make it easy for journalists to find the latest,most accurate information about new products orventures. In the case of a crisis, a blog allows you toshape the conversation about it.

Enhance brand visibility and credibility:Appear higher in search engine rankings, establish expertise in industry or subject area, and personalize one’s company by giving it a human voice.

Achieve customer intimacy:Speak directly to consumers and have them come right back with suggestions or complaints—or kudos.

What I intend in rest of this article is to help your company realize the full benefits of blogging.

How bloggers connect

Bloggers are somewhat like constantly circulating guests at a very large cocktail party: they don’t all talk directly with one another, but each of them talks to many others, thus forming a richly interlinked network. A simple google blog search shows about 18 million blosgs - this translates to several billion links.

Technically, conversations among bloggers can occur in two ways. Blogging software can be configured to allow blog visitors to post a comment that others visiting the blog can also view. Arunkottolli.blogspot.com - i.e. My blog has an area for visitors to comment on a particular blog.Most corporate blogs take a lead in the conversation on a particular topic. Also many corporate sites do not permit outsides to post comments on their blogs. Instead they provide links to other blogs to know what is being said about themselves or their blog in cyberspace. Companies can use blogs as listening posts - to keep an ear to the ground to hear what’s being said about it and if necessary speak up with a correction.

By not blogging, companies are missing out on the chance to contribute to conversation taking place in the blogsphere - thus allowing others to take charge on the direction and nature of the conversations.

Blogs also allows companies to communicate with journalists - who write about your company in traditional media (newspapers, magazines etc). A Euro RSCG Magnet and Columbia University Survey of the Media in 2005 found that 51% of journalists view blogs regularly.

Boost credibility and get closer to customers

Not surprisingly, many of the early adopters of blogs have been technology companies eager to leverage blogs’ ability to position a company executive for recognition as an expert in a given industry or on a specific topic. With his blog, Jonathan Schwartz, the president and COO of Sun Microsystems, has established himself (blogs.sun.com/jonathan) as a thought leader on issuespertinent to computer operating systems. Blogs allow companies to get their message out to the world in a direct and unfiltered way. Blogs allows Sun to write things that are read directly by software developers without being filtered by journalists and analysts.

Blogging by employees has made it apparent to the world that Sun is not a faceless corporate monolith but a community of people who are passionate about software and information technology, and eager to engage with customers. Blogs are an additional means to communicate with customers and help resolve customer issues directly by employees without the need for a formal corporate communication.

To get the most from your blog

For now, corporate blogging is still an evolving practice, with much testing and experimentation under way, and yet early practitioners and analysts agree that corporate blogs can deliver distinct benefits, provided they:

Have a distinct focus and goal

For a blog to deliver value, it has to be created with a specific purpose in mind. GM’s Lutz, for example, devotes much of his blog to discussion of car-design issues, his specialty. Sun’s Schwartz focuses on enterprise software issues in his blog. The blog written by Randy Baseler, a vice president of marketing at Boeing, focuses on commercial aviation topics (www.boeing.com/randy)."You need to set expectations very carefully as to what a corporate blog is going to be about. People will expect you to discuss everything about your company, but you need to stay on topic as explained and introduced," says Michael Wiley, the director of new media at GM.

Companies should carefully identify the corporate marketing objectives of any blog:

Are you trying to showcase your employees?Are you tyring to promote your products?Are you using the blog as a recruitment tool? ( as Monster.com does with their blog)Or is it more of a product support tool?

You have to determine what it is you are trying to get done.

For example, Organic food manufacturer Stonyfield Farm, for example, chose to launch four distinct blogs www.stonyfield.com/weblog, each targeting a specific consumer market for its products. One blog features a chatty organic farmer who produces milk for Stonyfield. On another blog, new parents at Stonyfield talk about babies. All four blogs reflect the firm’s commitment to environmentalism, good health, and organic food. "Our blogs are a way to showcase different aspects of our brand and encourage brand loyalty," says Cathleen Toomey, vice president of communications at Stonyfield, Who adds that company blogs have helped to more fully engage core customers, who then go on to become brand ambassadors for the firm.

Feature an authentic voice

Don’t let the PR department write your blog. Bloggers will sniff it out, and when they do, you will lose all credibility. Look at GM’s Lutz blog whose writing style is genuine, conversational, and engaging. In your blog, express your enthusiasm and passion for your work and your company’s product, with occasional asides on topics that reflect your personal interests. The latter will keep your voice authentic and increase the linkability of your blog.

Are open to comment

Permit both positive and negative posts on your blog, and reply to comments made on other blogs pertinent to your area of focus. Respond in a professional and businesslike way. If you don’t want to hear from your customers and critics in a public environment, don’t blog.Blogs that don’t feature comments from readers are missing a large part of what makes a blog interesting. Blogs are not meant to be a one-way conversation. Companies can easily configure the comment function so that it is delayed and can be reviewed.

Establish ground Rules

Some corporations simply advise their blogging employees to be guided by corporate communication guidelines already in place, blogs are a new and distinctive medium with distinct properties and accompanying risks. For a public company, there are certainly constraints about what can be said online, but they might not be apparent to all employees. In fairness to them, it’s a good idea to have a public policy in place with blogging dos and don’ts.

A final word

For a blog to accomplish its multiple purposes, it has to be updated regularly, at the very least once a week.

Tuesday, November 15, 2005

Branding has been the key for marketing for many decades. Branding is often associated a name, logo, tag line, colors and images. But the term ‘Brand’ has implications far beyond corporate logos, mission statements and theme songs. Effective branding is all about telling customers who you are, what you do and how you do it.

For high tech companies, Internet provides an ideal platform to create a strong brand identity. Business customers interact with the supplier mainly over Internet - even before they make the buying decision. For example, A prospective customer of Wipro Technologies, a provider of IT services will first visit Wirpo’s web site before Wipro’s Business Development manager can make a face-to-face presentation.

Today it's vitally important for B2B companies and high tech firms to use the Internet to make an impact with a solid brand Image. Here are nine tips to help you carve a focused identity online.

1. Define your brand up front.When visitors arrive at your web site, let them know immediately what you do and why they should care. Far too many web sites shroud their identity in flashy graphics and ambiguous slogans without telling people what the company or person actually does. View your Web site through the eyes of a new visitor. Does it spell out exactly what your brand stands for? If not, redesign it so your purpose and identity are unmistakable. For example, eSilicon Corp. Their home page displays:

"eilicon Corporation is a semiconductor company that manufactures and designs custom chips for the world's leading electronics companies. Our experienced in-house manufacturing and design teams integrate their deep domain expertise and proven methodology to consistently deliver first-pass silicon success and rapid time-to-volume. The result is fast, predictable and cost effective chip delivery"

The opening paragraph lets visitors know exactly who the site is for.

2. Lead with what you do, not who you are.

It may defy logic, but making your company name the most visible element on your home page may not be the most effective way to reinforce your brand. A Web-based or e-mail marketing message should state a benefit right off the bat.

Which of these paints a clearer identity: The business name "LSILogic" displayed in large letters or the more specific description "RapidChip® Platform ASIC combines three things: pre-verified slices, Intellectual Property and design methodology, to create silicon products."?The overuse of company name in the above example is undermining the brand of "RapidChip"

3. Use a real person as a figure head.

The online world can be a cold, mechanical place. Your branding efforts are more effective when you add a recognizable, consistent human element. Think of the way Steve Jobs promoted Apple. If your company has a CEO or spokesperson who is closely identified with the company, make sure that connection is maintained in cyberworld.

Web sites that carry the name, photo and personal message from the leader creates a soft human touch to otherwise a machine like web site. Nothing creates mystery and distrust more than a site that is void of a human contact and asks visitors to send e-mail to the "webmaster."

4. Develop a fan-club mentality.

Most online marketers try to generate readers, visitors or users. I encourage you to switch gears and create fans. "Users" are people who visit your web site, subscribe to your newsletter or buy your products and services. "Fans," on the other hand, have bought your product, rave about you to their friends and on your web.

Most companies have case studies buried deep in their web site which visitors must dig out to read. Having a customer testimonial in the opening page will send a powerful message to all prospective customers. For example Wipro’s home page prominently carries a customer testimonial.

5. Make good use of words.

Verbal content is not only the king, it's the entire kingdom. Even though designers try to squeeze as much graphic impact as they can out of limited bandwidths, what matters most online are the words you use. To create fans online, you must deliver useful brand-related information and speak to readers in a conversational tone. If it takes more than one or two scrolling screens to do that, so be it.

The common web page design guideline of not having to scroll for content is applicable - but to the front page or Index page only. For subsequent pages - where text based content is key, scroll is fine. Readers who land on these pages are curious to know more about you and will be willing to read through the text. For example see www.open-silicon.com. The Index page is limited to one screen, but subsequent pages have lots of information - but people don’t mind the scroll.

6. Make sure visual elements reinforce your identity.

While words are important, the look of your Web site must also support your brand image. Is your brand best served by hard edges or softer, rounded shapes? Do primary colors capture your personality or would earth tones be a better match? Find the design scheme that best compliments your brand identity.

As a rule of thumb, establish a set of corporate colors and shapes - and ensure that all the pages in the web site follow this color/shapes scheme. Consistency makes it easier to create web pages and the brand identity is reinforced in all pages. Most of the well established companies have implemented this policy. See www.intel.com, www.cisco.com or www.broadcom.com

7. Become a one-stop destination.

Let's say your company sells temperature sensors. You might simply post an online catalog and a few information about products. However, a far better approach would be to set up your site as a clearing house for all things related to temperature transducers -- articles on the technology of transducers, personal stories from customers who have benefited by using your product, a message board, information regarding use, service and repair of transducers etc. Your online presence should establish you as the primary resource of information for all temperature sensors.

A great example of this concept in action, check out www.xilinx.com. Xilinx's web site carries all information about FPGA and SoC related technologies.

8. Publish an e-mail newsletter.

Having a brand-centered web site is great, but you must rely on people taking it upon themselves to visit it. Offering a free e-mail newsletter allows you to build a database of subscribers who are specifically interested in what your brand represents. Better yet, being able to deliver your message by e-mail puts you in control of the frequency with which your audience is exposed to your brand. Repetition is critical. To generate subscribers, place a newsletter sign-up form on every page of your site. Note how this is done at www.xilinx.com.

9. Be visible through online forums.

Small high tech business should also regularly post to online forums, such as message boards and discussion lists widely read by people likely to be attracted to the brand. If your area of expertise caters to semiconductors, make sure you offer useful information -- not just a sales pitch -- at web sites which other ASIC designers usually read - www.eet.com , www.edn.com , www.soccentral.com etc. Be sure to include a link to your web site in a signature file at the end of each message.

Closing thoughts

The Internet is still a gold mine of opportunity, use it to create a recognizable brand identity. The above tips are basic guidelines - and when used consistently, it helps create a credible brand identity online.

Wednesday, November 09, 2005

In my earlier writing, I had described about using permission based emails as a marketing tool. Emails are effective and have earned their place in the marketer’s tool kit. Internet has evolved rapidly and has grown beyond email. Advances in technology has opened new channels for marketers: Blogs, RSS feeds and Podcasting have emerged as a viable marketing tool for customer communication. In this article, I will concentrate on RSS and its use as an effective communication tool.

RSS as a communication tool

As an alternative to email, RSS is becoming an increasingly important content delivery channel that allows marketers to deliver all of their content, fully upgrade all of their marketing initiatives and establish lasting client relationships.

Rising use of various Intranets, customer portals, secure web services etc - have created several new customer touch points. Communicating uniformly through all the touch points is a marketing challenge. The need to monitor and develop content for all the web based customer touch points takes a lot of resources. RSS makes it simple to manage and control customer communication through various web sites.

RSS feed for company news, customer updates, employee news/updates etc has to be created first. Once the feeds are created, it can be used in various websites and Intranets. Thus creating uniformity across various websites.

Here are some of the benefits marketers are missing out on by not marketing with RSS:

100% delivery of their marketing, relationship building and educational messages to their subscribers, customers, prospects and partners. E-mail isn’t getting delivered, but with RSS you will achieve 100% delivery.

Track how popular your communication messages are. Tools are available to track how many people are reading your messages from the RSS feed. This will help you customise and improve your company communication program

However, companies are slow in using RSS. Being a new technology, The next section talks on how to use RSS for marketing.

Using RSS for marketing

Most marketers still do not know how to actually get started with RSS, especially when trying to take its power beyond basic blogging. Here's a seven-step plan to help get you started. It includes a personal RSS marketing checklist to help you get the most from RSS marketing.

Step 1. Start using RSS as an end-user The first step to getting started with RSS marketing/publishing is getting your own RSS aggregator, subscribing to other RSS feeds and just seeing and understanding how it all works. There's a variety of RSS aggregators to choose from, including the following:

To find feeds of interest to subscribe to, cruise RSS feed-specific search engines such as www.feedster.com

Using RSS feeds to get information will help the marketer to get a basic understanding of how it works and how RSS can be used in the marketing plan.

Step 2. Plan your RSS feeds

Planning your RSS feeds might be the most important thing you do for RSS. It's the one factor that decides between RSS marketing success and failure. Start by identifying the different target audiences that you might want to reach with RSS, especially these:

Depending on how complex your business and online content strategies are, you might need to plan for different feeds for each of the target audiences you identify. Of course, this also depends on your marketing goals with each.

After identifying the key target audiences for RSS content delivery, the next step involves actually planning what content type and topics you are going to deliver. These might include the following:

Product feeds

Podcast feeds

News feeds

Articles feeds

Direct communication feeds

E-zine publishing

Autoresponder content

Forum content

Latest downloads

Product support information & updates

Step 3. Create a list of RSS marketing/publishing requirements

Then create a list of requirements for the RSS marketing/publishing solution you will obtain to publish your feeds. The list should answer the basic questions, such as these:

Do you want to integrate RSS publishing with your existing content management system?

What RSS metrics you'll want to watch? For example, are you satisfied with just a rough idea of how many people are reading your RSS feed, or are you interested in more precise subscriber counts, clicks and even individual content-item popularity?

Do you need feed personalization, such as personalizing your RSS content with the recipient's name and other details?

Do you want to provide your subscribers with the ability to precisely select the content they want to receive in your RSS feed (customization), such as by content topic, keywords, authors and so on?

Do you want the RSS feeds to be hosted on your own server?

Do you need the ability to target promotional messages or other content to your individual RSS feed subscribers, for example based on their previous clicks and reading habits, or even their subscription data?

After you've prepared a list of requirements, start searching for the appropriate tool. These come in a few general categories:

Desktop feed generation tools. Desktop software you can use to inexpensively, quickly and easily generate RSS feeds, but that doesn't allow for more advanced features such as content targeting.

Basic hosted online RSS publishing solutions. These work quite similar to desktop tools, but generally allow for a more streamlined publishing experience. Their key problem is that they usually require the publisher to host the feeds on the vendor's server, thus decreasing the SEO impact of RSS.

Advanced RSS marketing solutions. These will cover more advanced RSS marketing capabilities, such as metrics, scheduled autoresponder messages, database building capabilities and similar features.

High-end email integrated solutions. Email integrated solutions are the most recent newcomer to the RSS industry, being provided by some of the best reputable email vendors, and providing marketers with full integration with their existing email marketing solutions.

Other options. There are other options as well—for example, using your existing content management system to publish RSS feeds, or using a blog publishing solution, which allows for some basic RSS publishing features but not much in terms of RSS marketing.

Step 5. Promote your RSS feeds through your own channels

Create an RSS presentation page to explain to your visitors what RSS is; how the visitor will benefit from using RSS; where they can get a free RSS aggregator (recommend one yourself!); how they can subscribe to your RSS feeds; and why they should subscribe to your own RSS feeds.

Then, on this same page, include the links to all of your RSS feeds. In addition to the standard orange RSS button, also include direct links for subscriptions via My Yahoo and other relevant services, such as Bloglines.

Promote the RSS presentation page as much as you can using all of your available channels.Promote your RSS feeds directly below your e-zine subscription box, and always "above the fold." Promote your RSS presentation page (telling your visitors that's where they can subscribe to your feeds) on the most prominent locations of your site.

If you're publishing more than one RSS feed, or a couple of focused-topic feeds, promote each of them next to their topics on the site.

Promote your RSS feeds in all of your email messages and e-zine issues.

As for the content, don't just say "Subscribe to receive news from my site." Instead, prepare compelling copy to show your visitors why they need to subscribe to your content in the first place, and why they should subscribe specifically to your RSS feeds.

Enable auto-discovery to allow browsers with integrated features to easily discover your feed upon visit, and help search engines locate it on your site.

Step 6. Promote your RSS feed through external channels

Submit your feeds to the appropriate search engines and directories.Ping the RSS aggregation sites each time you update your online content, letting them know that new content is available to be indexed.

Step 7. Other key RSS activities

Measure and optimize your feeds.Tools are available which will help marketers track how many people are reading the RSS news feeds. This will indicate which articles, news items are popular and which are not - thus help you improve/optimize your RSS feeds.

Syndicate your feed content to other Web media.Allow third party websites to carry your RSS feed only if that is an appropriate place for the message you are trying to communicate. The best place is often your company’s partners, associates and collaborators.

Display third-party RSS feeds on your site.RSS feeds from your partners, colloborators can be displayed in your website. In return, make them carry your RSS feed on their website. This increases your message coverage and builds a brand reputation.

Big Guys Join in

Microsoft recently announced that the upcoming Longhorn operating system, as well as the next version of Internet Explorer, will include the ability to read RSS feeds. Google has gotten into the picture as well by supporting the addition of AdSense advertising into RSS feeds. Finally, Yahoo! has given you the ability to add RSS feeds onto your "My Yahoo!" homepage, where the headlines are updated automatically. All of this indicates that RSS will not only continue to live, but that we are on the edge of an RSS "explosion"

What does this mean for marketers?

A) By being integrated in IE and other Microsoft software, RSS will achieve mass penetration. For marketers this means that RSS will finally become one of the standard tools of mass communication and content delivery. Furthermore, internet users will start to expect RSS from marketers, probably even more so than e-mail newsletters.

B) Marketers will no longer (eventually, of course, when most of the world starts using the latest software versions) need to explain how to get an RSS reader, but will be able to focus only on presenting their business and benefits to the end-user.

C) Broader RSS integration in Microsoft's tools will enable for additional RSS uses, far beyond basic content delivery in the form of stories, podcasts and products. Marketers and developers will be able to deploy rich interaction applications to make communication and business/personal interaction more fluent, easier and more effective. In essence, for many advanced marketers the capability of marketing with RSS will mean they're either "in" or "out" of the game.

D)This is now official.Marketers need to start taking the lead and implementing RSS feeds across all their communicational initiatives, from PR to direct marketing and sales.

Wednesday, November 02, 2005

It is a widely accepted tenet of marketing that companies can sustain competitive advantage only through product differentiation based on unique features and benefits. But this is only half the truth. Products win when differentiation is based on features or benefits which are valued by customers.

Unless a product is really different from the competing product in terms of what the customers perceive its value and market differentiation, it is bound to fail (or fail to win).

Yet, many companies wrongly allocate millions of dollars to add a slight twist to their product : A new color, a new taste, a new chemical, or a new label — to distinguish it from the previous version. They put an equal amount of money into promoting their new-and-improved product through advertising and other marketing campaigns. Their return, over the long term, is usually marginal. The reason why this happens is due to the fact that marketers have built a perceived product difference for their products when compared to the competition - But customer does not care or value those differences. Take for example, the web enabled refrigerator from Whirlpool, or Intel’s ‘Manitoba’ processor for Cell phones, or IBM’s routers. These products failed to create a significant differentiation in the minds of the customer and disappeared from the market.

Meaningful Differences

So What’s going wrong? When companies are so preoccupied with fiddling with individual products and brands, they lose sight of the value they can create for customers.If Manitoba, Motorola Razr cell phone, Via C6 CPU, or Transmetta disappeared tomorrow, most customers would hardly notice. At most a few will be slightly inconvenienced by having to switch to an alternative.

But how would the customers feel if HP, Qualcomm, CISCO, DELL or IBM disappears? Such an event will have a tremendous impact on several customers. These companies represent an entire category — Printers, CDMA chips, Routers, Personal Computers, or Enterprise systems. Notice how these companies represent an entire sector. These category leaders are being rewarded by customers for constantly raising the standards and quality. And these type of companies are what customers care about.

To become an industry leader, companies must really know what customers care about and then deliver more than their expectations. As long as a company is listening to the customer’s needs and constantly are able to beat customer’s expectations, they will be rewarded by customers in form of market leadership.

Take Broadcom for example, Broadcom launched Ethernet MAC chip which was faster and cheaper than that from the incumbent leader 3COM. Qualcomm then sold their ethernet solution to Cisco, Linksys and others. Soon Broadcom became a leader in Ethernet solutions and has maintained that position ever since - by constantly raising the performance bar for its chips while lowering the price for customers.

Another example, In 1993, Unilever launched Mentadent toothpaste, a combination of toothpaste, baking soda, and peroxide delivered through a clever pump. Within two years, Mentadent became a $250 million brand with a 12 percent share of the U.S. toothpaste market, an impressive figure in this crowded category.

Why? Because Unilever understood that dental hygiene is what’s on people’s minds when they buy toothpaste. So the company created a product that offered superior dental hygiene. Unlike a meaningless pink stripe down the middle of the toothpaste, this was differentiation that made a difference.

Maintaining InnovationIn today’s fast pace of business, where the value added to products and services may quickly be commoditized, it’s essential for companies to be focused on customer expectations to be keenly aware of the product features that customers want, and to continue to deliver them as they improve their offerings and the expectations for the category. If they do not do these things, companies risk losing market leadership.

Xerox, US based leader in photocopiers, learned this lesson well when it lost its market leadership to Cannon and had a near death experience. Xerox for long dominated the photocopier market and concentrated on developing big office copiers and ignored the needs of small offices. Japanese manufacturers - Panasonic, Kyocera and Cannon soon discovered the need for small desktop copiers and quickly captured a huge market share. Xerox in the mean time had also failed to develop office printers. Cannon licensed its Laser printing technology to HP - and HP soon took market leadership in office printers. By failing to listen to customer’s needs, Xerox failed to innovate and that caused the company to fall from its mighty position.What these examples tell us, and what we have learned, is that most companies succeed by consistently satisfying basic customer needs better than the competition, not by continuously pitching them a unique selling proposition.

Branding for Services & Esoteric products

My firm makes custom chips for customers - referred as ASICs (Application Specific Integrated Circuits). To build a distinct brand, the firm has to differentiate itself from the competition - mainly the incumbent leaders LSI Logic, IBM, Fijitsu, and Samsung, by offering products to customers which beat their expectations (Note that in almost all cases, customer’s expectations are being set by the incumbent leaders). Merely offering better product/service is not enough - we have to know and understand what customer needs are and then offer more than what they are expecting.

In such cases, the new entrant is the challenger. Challengers can win only when they beat incumbent’s offerings in the minds of the customer i.e., the customer must feel that the challenger’s offering is superior to that of the market leader, and the challenger provides a risk free migration path for the customer to move his existing business from the incumbent. Only then a strong brand can be built by the challenger.

Often times, firms which offer high tech products or services fail to distinguish themselves from the competition. For example, Wipro, TCS and Infosys - three leading IT services providers from India. These firms collectively have been able to differentiate from the market leaders: IBM, EDS & Accenture. But have failed to distinguish among themselves. Customers cannot distinguish Wipro from Infosys from TCS.

Another example would be Open-Silicon and eSilicon. Both these silicon valley firms are fabless ASIC vendors challenging the market leaders. Yet customers cannot really differentiate Open-Silicon from eSilicon.

This happens because the challenger is focused on beating the incumbent and forgets that other companies(challengers) exist. The only way to create a distinct brand in such cases is to focus away from beating the incumbent - and focus on what the customer needs. And then figure out ways to beat customer’s expectations. The product/service features that help meet & beat customer expectations will then become the key brand attributes - which can be advertised to promote the product. This on the long run creates a distinct brand in the minds of the customer - and over a period of time will help the company build a market leadership position.For example, take the example of Southwest Airlines. Southwest airlines concentrated on providing low cost air travel with minimum hassle. Over the period of time, Southwest Airlines has developed several brand attributes: No assigned seating, No in-flight food service, no business class, Humorous flight attendants, on-time flights and low fares. Southwest Airlines has developed a strong brand name in US aviation - based on distinct brand attributes.

ConclusionBuilding a distinct brand in the minds of customers is possible only when customer perceive that they are getting a distinctly superior product or a service when compared to that offered by the competition. This has been proven several times in the past - Southwest, Qualcom, IBM, Uni-Lever etc. succeeded only because they listen to customer’s needs and beat their expectations.